Adam Friedman

We are excited to share a recent decision of a case handled by Friedman Vartolo, LLP. In US Bank Trust, National Association, as trustee for Bluewater Investment Trust 2018-1 v. Robert A. Bard, et al. Superior Court of New Jersey, Appellate Division, 04/28/2020, 2020 WL 2036643, Friedman Vartolo LLP successfully defended the appeal of a summary judgment award to the foreclosing lender.  New Jersey’s Appellate Division rejected defendant-borrower Robert A. Bard’s arguments, including that the subject mortgage loan did not require defendants to make monthly loan payments. 

This appeal follows the foreclosure of a 2008 mortgage loan granted to defendants Robert and Eleanor Bard in the amount of $634,000. The loan was modified in 2014 and the modification agreement was recorded in 2015. Defendants defaulted on their loan payments in September 2017. 

In December 2018, plaintiff moved for summary judgment and to strike defendants’ answer. In their opposition to the summary judgment motion/cross-motion to dismiss the complaint, Defendants alleged, most notably, that they never defaulted under the terms of the subject promissory note because their modified loan allegedly provided them the option to forego monthly installment payments in favor of a lump sum payment at the loan’s maturity in 2054.

In granting summary judgment, the trial court ruled that Plaintiff established its prima facie right to foreclose by showing, among other things, that Defendants borrowed the sums alleged and defaulted in their repayment of the loan.  “The defendant has acknowledged failure to pay, although he has asserted that he believed in his interpretation of the note that he could just wait and pay it all at the maturity date. The [c]ourt is satisfied in reading the note that that is not an option…the note generally provides for monthly payments and provides for a default upon failing to make the monthly [payment].  [T]he note [clearly] contemplated that monthly payments would be made.” US Bank Trust, Nat’l Assoc., as Trustee for Bluewater Investment Trust 2018-1 v. Robert A. Bard, et al., No. A-4371-18T4, 2020 WL 2036643, at *1-2 (N.J. Super. Ct. App. Div. Apr. 28, 2020)

On appeal, defendant argued that the trial court erred in granting summary judgment because there existed a material dispute of fact as to whether defendants defaulted. The Appellate Division

affirmed the trial court’s decision, rejecting Defendant’s argument that no payment was due until 2054.  “As the trial judge noted, the plain language of the note and the modification agreement provided no support for defendants’ theory, clearly required regular monthly payments, and set a fifteen-day deadline before defendants were considered in default. Defendants’ unsupported theory did not create a material dispute in fact thwarting the entry of summary judgment.” Id at *2-3.

The Appellate Division also rejected Defendants’ arguments concerning Plaintiff’s proof of compliance with the notice requirements of TILA and New Jersey’s Fair Foreclosure Act.  The court ruled that these arguments were either improperly before the court, to the extent they were not raised to the trial court, or unsupported by the record of the case. 

A fantastic job by Michael Eskenazi, Esq. of our firm. For more information regarding this case, please contact Deborah Gallo, Director of Operations at [email protected]

In the midst of the COVID 19 pandemic, we are attempting to predict what will happen in the default servicing world over the coming months.  I could reference the current COVID 19 figures today but, they would be outdated before I finished posting the article. 

For the default world, both counsel and servicers were required to have disaster response, business continuity and pandemic policies in place.  For those like our firm, placed in the northeast of the USA, we quickly went remote for the health of our staff and the ability to continue to service our clients. 

So, what can we anticipate?  Delinquencies will likely jump significantly with rising unemployment.  The Corelogic Loan Performance Insight Report was released yesterday.  It starts with the news that delinquencies were down from 4.0 a year earlier to 3.5 of home mortgages.  The lowest in more than 21 years.    The among the highest serious delinquency rates include New York, New Jersey, and Connecticut.  All three states are reeling in the wake of COVID-19. 

First comes compliance, making sure that servicing is complying with the newly enacted CARES Act of 3/27/2020, and that servicing requirements are updated. As well as, continuing to monitor the changes as they are implemented (suspension of foreclosure activities, credit bureau reporting, forbearance and workout options). 

Second, servicers must be staying up to date on the State level mandates and changes.  Many firms continue to send out regular updates as Governors issue Executive Orders and Courts issue directives and Administrative Orders.  As of 4/13/2020, the New York Virtual Courts are Expanded beyond Essential Matters.  While the existing ban on filing new “non-essential” matters remains in effect in New York, the Judges will now begin the process of remotely scheduling and conducting conferences for pending civil (and criminal) cases. As for New Jersey, On March 27, 2020, the Supreme Court of New Jersey issued an Omnibus Order amending and extending the guidance provided in its March 17, 2020 Order.  Specifically, where practicable, all hearing, conference and arguments will be conducted by video or phone conference.  Furthermore, the Office of Foreclosure will not review or recommend motions or judgments received on or after March 1, 2020 pending further court order.

As with most everything, communication is key.  Conference calls, virtual meetings, virtual trainings and events are the key way to keep staff informed and evolving in a very fluid scenario which seems to change almost day by day. Stay safe and for more information regarding recent changes, state level updates or to schedule a virtual meeting for your teams, please contact Deborah Gallo, Director of Operations at [email protected]

On June 24, 2019 P.L.2008, c.127 was enacted by the New Jersey Senate and General Assembly. It required the Department of Community Affairs to create a website or portal where residential mortgage lenders can submit a copy of the Notice of Intention to Foreclose (“NOI”) along with all relevant information (address, county, municipality, block, lot, current owner and date of NOI). After submitting the information, the DCA is directed to send notification to the residential mortgage lender confirming that the submittal has been received. Receipt of this confirmation is to be plead within the foreclosure complaint.

             The act provided a grace period that expires today. All NOIs sent prior to April 1, 2020 do not need to be registered on the portal. All NOIs sent on or after April 1, 2020 need to be registered. Yesterday we received the instructions for accessing the portal and setting up a username and password. Please find the FAQ and User Guide attached to this email. Usernames must be obtained by the lender or servicer who can then designate people or entities to register NOIs on their behalf. We recommend that all servicers review the attached documents and move quickly to set up a username so that new NOIs will be compliant. If any servicers or lenders would like assistance, please let us know. If you have any questions or concerns, please contact Catherine Aponte, Esq., at [email protected] or Deborah Gallo at [email protected]

On March 19, 2020, the New Jersey legislature passed Assembly Bill 3859, which stays the enforcement of all judgments of possession, warrants of removal, and writs of possession during a Public Health Emergency. The intention being to reduce the number of individuals that could be displaced during a pandemic. However, a court on its own or by a motion made by a party, an order can be entered permitted enforcement if it is in the interest of justice. Finally, it should be noted that the moratorium on enforcing evictions does not prohibit the initiation or continuation of either eviction or foreclosure proceedings during a Public Health Emergency. If you have any questions or concerns, please contact Catherine Aponte, Esq., at [email protected] or Deborah Gallo at [email protected]